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EUR/JPY is narrowing its trading range after a significant gain on 29th of June and has formed a Descending Triangle pattern on the 1H chart. The pattern has 79% quality and 92% magnitude in the 104-bar period.
The pattern started when the pair bounced from 98.338 and after testing pattern's resistance band at 101.2747 and 100.837 it has slowed slightly above SMA200 level at around 99.900 where the pair is currently trading. Pattern's support line is at the level of 99.789 and is set to intersect with the resistance line on the 6th of July, 22:00 GMT. Technical indicators on aggregate do not suggest any clear emerging trends on the 1H and 1D outlooks. However, the SWFX market sentiment, with 70% of traders expecting further augmentation of the pair and the Stochastic indicator on the 1H time horizon suggest a possible bull market outbreak. Long traders could set their limits at the 4th of July closing price at 100.104 and at 100.352 where we can find the recent peak.
Technical indicators on aggregate point at a bearish market development on the 4H horizon. Short traders could focus on the SMA200 level at 99.887. If this level is breached, next targets could be set at the pattern's support band at 99.789 and slightly above the pattern's kick out point at 98.548.
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